As these consumers seek out a comprehensive mobility experience, industry
experts predict that flexible transportation services will replace the
purchase of personal vehicles for multiple uses, and intelligent vehicles
will cater to consumer demands for greater information, safety, and
environmental responsibility.

The report was unveiled here today at the Center for Automotive Research's
Management Briefing Seminars conference.

Consumers continue to become better informed and more demanding and they
will drive transformation in the current purchasing model for vehicles.
The study concludes that consumers will expect to purchase or lease a
vehicle that comes with flexible access to a diverse "garage" of vehicles.
In the current model, consumers are often restricted by finances and buy a
compromise vehicle, or they buy a car with features that don't get used.

In the new model, consumers will drive a primary vehicle that best meets
their daily needs, and have the option to change to a different model, as
needed. For example, someone may drive a small, fuel-efficient vehicle
during the week, but have access to a sport utility vehicle for a weekend
ski trip or a luxury sedan to attend a wedding.

"Basic transportation will no longer be enough for increasingly empowered
consumers. They want an automotive experience that matches their lifestyles
and lets them move seamlessly from life inside the vehicle to their world
outside," said Sanjay Rishi, Vice President and Global Automotive Industry
Leader for IBM.

The IBM Automotive 2020 Global Study is based on interviews with 125
executives in 15 countries from automotive OEMs, suppliers, and other
thought leaders. Eighty-five percent of the top automotive companies
worldwide -- including all of the top 10 -- participated. The study,
entitled "Automotive 2020: Clarity Beyond the Chaos," was developed by the
IBM Institute for Business Value to determine the needs of and anticipate
industry response to today's changing automotive ecosystem.

The Intelligent Vehicle

Consumers are demanding more information and entertainment from their
vehicles, as well as increased safety, economy, and environmental
responsibility. This is spurring the manufacturing of "intelligent"
vehicles -- cars and trucks that use electronics to provide greater
assistance with navigation, and provide more information about the vehicle,
its environment, and connectivity. Technologies that will have a growing
presence in vehicles by 2020 include telematics, including remote vehicle
prognostics and active safety (capabilities that sense and respond to
driving behaviors and road conditions); a wide array of entertainment
choices such as data downloads and streaming media; and power train
innovations.

Consumers will benefit from connectivity between their vehicles and other
vehicles as well as road infrastructure. Information captured from breaking
patterns -- for example, from vehicles approaching a recent accident --
will be transmitted to other vehicles. Alternate routing options delivered
dynamically will help consumers avoid congestion and delays, and active
safety features will enable crash avoidance.

Hybrid Engine Trend Accelerates

Alternative power will see continued innovation that extends far beyond
2020, with hybridization and battery technology leading the drive toward
environmentally sustainable transportation.

Micro, mild and full hybridization are currently undergoing extensive
development today, and study participants believe strongly that by 2020 all
new vehicles will have some level of hybridization.

Hydrogen fuel-cell vehicles will remain a viable alternative, but
projections put only a small fraction of vehicle production migrating to
this technology by 2020, due to cost-prohibitive processes and new
infrastructures. Bio-fuels will also see their share of investments, and
non-food-based bio-fuels will grow.

Five Imperatives for the Automotive Industry

Based on the Automotive 2020 study and related research, IBM has defined
five imperatives that are likely to distinguish the outperformers in the
automotive world of 2020:

* Advance mobility. Auto companies must embrace new mobility models, such
as new ownership and usage models and integration of other modes of
transportation; e.g., when you arrive at the train station your car is
waiting for you.

* Transform retail. Auto companies and dealers will need to find new ways
to connect with sophisticated consumers and develop a new value proposition
for dealerships.

* Simplify complexity. As vehicles become more connected and intelligent,
their electronics and embedded software become more complex. IBM recommends
that OEMs establish common processes, and standards so to enable
innovations from traditional and non-traditional suppliers to be rapidly
integrated.

* Partner extensively. To address the increasing cost of innovation,
companies need to widen their enterprise innovation networks and extend the
partnering concept to go beyond the current suppliers. Close relationships
with companies in other industries, especially electronics, energy, and
utilities, will become a necessity.

* Execute globally. OEMs and suppliers should create balanced, flexible
operations aligned with local economies while having a positive social
impact wherever business is done.

"In the face of such significant and chaotic change, finding clarity will
require the automotive industry to take sweeping and rapid action. Two of
the greatest areas of opportunity are meeting consumer demands for
environmental accountability and using technology to transform the way the
industry develops products and goes to market," said Rishi.

About the Automotive 2020 Global Study

The findings of this report are based upon interviews conducted by IBM in
2008 with 125 executives in 15 countries, from a broad representation of
automotive OEMs, suppliers and influential third parties.

Participants represented 85 percent of the top auto companies worldwide
based on revenue, including all of the top 10. Sixty-two percent of the
interviews were with traditional participants in the industry (OEMs and
suppliers); other interviews were conducted with industry associations,
government economic development groups, specialty companies, academic
institutions and other organizations that provide a viewpoint on the future
of the automotive industry.

Emerging nations, such as Brazil, Russia, India and China, accounted for 27
percent of the interviews. The Automotive 2020 Global Study provides
insights about the future needs and anticipated industry response to the
changing automotive ecosystem.